Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

What’s “Froot Loops” in Italian?

The European confectionary company Ferrero has agreed to buy WK Kellogg Co., the manufacturer of iconic American cereals, for $3.1 billion.

The acquisition is set to bring the publicly traded maker of Froot Loops, Frosted Flakes and Rice Krispies under the privately owned Italian manufacturer of Nutella, Tic Tac and Kinder chocolates.

WK Kellogg, based in Battle Creek, Michigan, was spun off from Kellogg’s in 2023, splitting the company’s North American cereal business from its other snack products like Pringles and Pop-Tarts, a unit that is now owned by the publicly traded conglomerate Kellanova. WK Kellogg, one of North America’s largest cereal makers, saw its shares surge more than 30% Thursday on the news of the deal.

The agreement comes after years of slowing demand for sugary breakfast cereals as many consumers look for healthier options. WK Kellogg came under fire last year when CEO Gary Pilnick said on CNBC that households squeezed by food companies’ price hikes should consider eating “cereal for dinner” to save money, part of a marketing pitch the company was making as an answer to inflation.

Yet snack demand, too, has flagged recently, with The Campbell’s Co. and General Mills each warning this year of slower sales as customers prioritize square meals.

Ferrero, perhaps best known for its namesake Ferrero Rocher chocolates in gold foil, originated in Alba, Italy, after World War II and is now a multinational food maker headquartered in Luxembourg. The company reported revenue of 18.4 billion euros last fiscal year, up nearly 9% from the one before.

Ferrero executive chairman Giovanni Ferrero described the acquisition Thursday as “a key milestone” in an effort to grow its footprint in North America, where the closely held company sells an array of popular candies.

The deal is among a series of high-profile Ferrero acquisitions in recent years. The firm bought Butterfinger, Baby Ruth and other U.S. candy brands from Nestlé in 2018, then acquired Kellogg’s bakery business, including Famous Amos and Keebler, in 2019 along with the manufacturer of Halo Top ice cream in 2022.

After the transaction closes, WK Kellogg will be delisted from the New York Stock Exchange and become a wholly owned subsidiary of Ferrero. The deal is expected to close later this year.